Arimidex price markup at major pharmacy chains

The commonly prescribed breast cancer drug, Arimidex, was released as a generic in June 2010. The generic name is anastrozole. I called several local pharmacies last week to find out how much this medicine would cost for a one-month supply. I found some very surprising results:

Costco: $27

Walgreens (with Saver Card): $325 (without Card): $380

CVS: $361

Walmart: $347

Target: $340

These are not typos. Costco is selling a one-month supply of generic Arimidex for $27, while everyone else in town is selling it for over $300.

How can this be?

Because Costco’s pricing policy is that they charge their customers the wholesale price plus a 14-15% mark-up. (And remember: you don’t need to be a Costco member to use the pharmacy.) The other pharmacies typically try to get as high a profit margin as they can when new generics are released, presumably because they know customers are used to paying an even higher fee for the branded medicine (e.g. non-generic Arimidex retailed for more than $400).

But come on. How can you justify extracting a profit margin of over 1000% from breast cancer patients? That’s just unseemly.

 

Leslie Ramirez is an internal medicine physician and founder of Leslie’s List, which provides information that enables all patients, but especially the uninsured and underinsured, to find more affordable medications and health care services.

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  • HJ

    “How can you justify extracting a profit margin of over 1000% from breast cancer patients?”

    Because this is how the market works…maximize profits.

  • Anon-MD

    This is not how a real “market works”

    Most of those patients are not paying anywhere near that. Their insurance policy is. It is called moral hazard, or paying with “other people’s money”

    It would be fixed overnight if patients actually paid some share of the cost of their meds.

    Instead we have part D to “protect” patients from the “high cost” of drugs …

    Also, to remove any responsibility on their part to shop for them

    I have had patients tell me they don’t want to shop around because “it is easier to get all my drugs in one place” … even when I tell them exactly where they can get Arimidex cheaper.

    How many of them would say that if they were responsible for this markup???

    • HJ

      For those paying cash for their medical care, they deal with market based influences. As a business, I can charge what I want and if people buy my product, then great. If not, I lower my price.

      • Justin

        Anon-MD, great point!

      • http://mickthepharmacist.tumblr.com/ Mick

        Very true. With cash – that’s the free market at work with free market rules- I have seen some crazy adjustments in price when a 3rd party is involved. I used to work for the state of California health plan. There was a reason that brand Glucophage was the preferred med over generic metformin.

  • JScarry

    A slightly different question is, How much are the insurance companies actually paying for the drug? I’d bet the negotiated rate is much closer to the Costco price. We see that all the time on our EOBs. A recent X-ray was billed at $138.60 and the amount allowed was $64.45.

    For relatively healthy people like us, the main benefit we get from the insurance is dramatically lower out-of-pocket costs for our health maintenance visits.

  • Skip-RPh

    Costco is selling the drug for 15% above their actual cost. The other chains are marking the drug up from AWP (average wholesale price). AWP is an arbitrary amount provided by the manufacturer of the drug, but it is always well above the true cost. States reimburse medicaid Rx’s at AWP minus a discount or the pharmacy’s usual and customary price, whichever is less. If CVS sold anastrozole for $27 then that is what it would bill medicaid. CVS fills far more Rx’s for medicaid customers than it does for cash customers, thus the high cash price. It isn’t right, but that’s the way it is.

  • Dr. Kene Mezue

    “Other peoples money…” Could also be government money through Medicaid and Medicare…and that’s why for really frivolous reasons ($27 vs $400) the American Government spends more than double per person on health than other developed economies in Europe and Asia and ends up having worse health outcomes…Maybe the reforms should have focused on these types of loopholes…